-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K1YlTOUdsE3w7UGfmwlozcrqvagcbl+1/5Ed7U7NbgkDiWCV+0lRPsVk14XLdJ8/ c0w8qHfaW+7yIbjoj22f6A== 0000912057-00-052527.txt : 20001208 0000912057-00-052527.hdr.sgml : 20001208 ACCESSION NUMBER: 0000912057-00-052527 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY DEAN WITTER ASIA PACIFIC FUND INC CENTRAL INDEX KEY: 0000919808 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: SEC FILE NUMBER: 811-08388 FILM NUMBER: 784688 BUSINESS ADDRESS: STREET 1: 1221 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 6175578742 MAIL ADDRESS: STREET 1: MORGAN STANLEY ASIA PACIFIC FUND STREET 2: 1221 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY ASIA PACIFIC FUND INC DATE OF NAME CHANGE: 19940505 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY ASIA INVESTMENT FUND INC DATE OF NAME CHANGE: 19940316 N-30B-2 1 a2032212zn-30b_2.txt N-30B-2 ----------------------------------------------------------------- MORGAN STANLEY DEAN WITTER ASIA-PACIFIC FUND, INC. ----------------------------------------------------------------- THIRD QUARTER REPORT SEPTEMBER 30, 2000 MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. INVESTMENT ADVISER MORGAN STANLEY DEAN WITTER ASIA-PACIFIC FUND, INC. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DIRECTORS AND OFFICERS Barton M. Biggs CHAIRMAN OF THE BOARD OF DIRECTORS Harold J. Schaaff, Jr. PRESIDENT AND DIRECTOR John D. Barrett II DIRECTOR Gerard E. Jones DIRECTOR Graham E. Jones DIRECTOR John A. Levin DIRECTOR Andrew McNally IV DIRECTOR William G. Morton, Jr. DIRECTOR Samuel T. Reeves DIRECTOR Fergus Reid DIRECTOR Frederick O. Robertshaw DIRECTOR Stefanie V. Chang VICE PRESIDENT Arthur J. Lev VICE PRESIDENT Joseph P. Stadler VICE PRESIDENT Mary E. Mullin SECRETARY Belinda A. Brady TREASURER Robin L. Conkey ASSISTANT TREASURER - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INVESTMENT ADVISER Morgan Stanley Dean Witter Investment Management Inc. 1221 Avenue of the Americas New York, New York 10020 - -------------------------------------------------------------------------------- ADMINISTRATOR The Chase Manhattan Bank 73 Tremont Street Boston, Massachusetts 02108 - -------------------------------------------------------------------------------- CUSTODIAN The Chase Manhattan Bank 3 Chase MetroTech Center Brooklyn, New York 11245 - -------------------------------------------------------------------------------- SHAREHOLDER SERVICING AGENT American Stock Transfer & Trust Company 40 Wall Street New York, New York 10005 (800) 278-4353 - -------------------------------------------------------------------------------- LEGAL COUNSEL Clifford Chance Rogers & Wells LLP 200 Park Avenue New York, New York 10166 - -------------------------------------------------------------------------------- INDEPENDENT ACCOUNTANTS Ernst & Young LLP 787 Seventh Avenue New York, New York 10019 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- For additional Fund information, including the Fund's net asset value per share and information regarding the investments comprising the Fund's portfolio, please call 1-800-221-6726 or visit our website at www.msdw.com/im. LETTER TO SHAREHOLDERS - ---------- For the nine months ended September 30, 2000, the Morgan Stanley Dean Witter Asia-Pacific Fund, Inc. (the "Fund") had a total return, based on net asset value per share, of -15.19% compared to -19.72% for its benchmark (described below). For the period from the Fund's commencement of operations on August 2, 1994 through September 30, 2000, the Fund's total return, based on net asset value per share, was 8.96% compared with -17.99% for the benchmark. The benchmark for the Fund is comprised of two Morgan Stanley Capital International (MSCI) indices; Japan and All-Country Asia-Pacific Free ex-Japan, with each index weighted equally. On September 30, 2000, the closing price of the Fund's shares on the New York Stock Exchange was $9 7/16, representing a 26.8% discount to the net asset value per share. ASIA EX-JAPAN The third quarter saw a severe downturn in most Asian markets. An uncertain global growth environment, escalating oil prices, political uncertainties and earnings downgrades from leading U.S. technology companies caused a big sell off in Asian stocks. Inflationary risks and U.S. interest rate risks that were prominent in the first half of the year receded as the U.S. economy slowed down, but fears of an earnings risk from collapsing demand increased substantially. The Korean market suffered a number of setbacks in the third quarter and was among the worst performing markets in the region. The withdrawal of Ford Motors from its bid to take over Daewoo Motors was seen as a major negative to corporate restructuring. Restructuring in Korea on the financial and corporate fronts has made progress over the last two years but this has been painfully slow, partly because the big gains seen in equity markets in 1999 had induced a degree of complacency. However, with the recent collapse in asset prices, government and corporates now have no other choice but to continue to push ahead and implement reform. It is likely that Korean restructuring will regain momentum in the next six months. The government made a firm commitment recently to address systemic risk in the financial system that would result in a consolidation of the banking sector. As a result, we increased our weighting in the highly undervalued Korean banks. The re-rating for the Korean market should happen only gradually as the credit allocation process improves, and when return on equity reaches higher levels relative to historical averages. China continued to generate a stream of positive economic data. Retail sales, contracted foreign direct investment, real estate prices and exports were all on an uptrend through the third quarter. Export growth, largely a function of global demand, seemed to be peaking. China laid out the road-map for significant financial sector reforms and is likely to open up the A-share market to foreign investors over a two-year time frame. After the successful listings of Petrochina and China Unicom, we expect to see another sizable offering from Sinopec in the oil-refining sector. China continues to push forward the restructuring theme of privatizing state assets to improve allocation efficiency. We continue to maintain a positive bias towards China equities as the subset of investable companies continues to expand. China looks set to join the WTO, and its entry should ensure continued reform and liberalization. Taiwan was the worst performing market in the third quarter, bogged down by political issues relating to the anti-corruption drive launched by the DPP government. A number of bankruptcies emerged from this clean up process and bank loans that were done on non-economic terms were recalled. Domestic investor confidence has ebbed and government intervention to prop up the stock market is having little effect. With the domestic credit system strained, access to finance is becoming a major problem for corporate Taiwan. The retail response to the recent Chungwa Telecom deal was very poor. We are seeing a spate of foreign fund raising from Taiwan companies even at the current prices. Earnings revisions for Taiwan companies are on a downward trend and technology stocks have been marked down considerably from their highs by investors worried about declining personal computer sales and the end of the semiconductor cycle. We believe that the semiconductor cycle is witnessing a mid-cycle correction and is likely to show good growth for another two years. We continue to have a positive stance on semiconductor foundry stocks in Taiwan. Hong Kong has been one of the best performing Asian markets this year. A strong China macroeconomic story and renewed attention on banking and property sectors as investors withdrew from TMT (technology, media and telecommunication) sectors, gave positive momentum to the market. The improving outlook for U.S. interest rates and a significant under-ownership of traditional economy stocks resulted in the significant outperformance of property and bank stocks in the last quarter. As most Hong Kong banks over-provisioned in tougher times, we saw a steep decline in provisioning charges and strong profit growth in the first half of the year. Loan growth has been picking up, albeit slowly as banks focus on consumer lending. Retail sentiment on property has improved as the government stepped back from supplying units in the mass residential market via the home ownership scheme. The upcoming "new economy" sectors in Hong Kong which were rising high early this year have deflated considerably, led by Pacific Century Cyberworks, which has halved since the merger with Hong Kong Telecom. Although Hong Kong serves as a good defensive market during times of melt- 2 down in global technology stocks, we are still cautious given the recent outperformance and the fact that the economy has clearly lost some momentum recently, notably in exports and consumption. Growth should return to normal over the next six to twelve months, after the phenomenal cyclical rebound seen in the first half of this year. As for the Southeast Asian markets, Thailand, Indonesia and the Philippines in aggregate no longer have the critical mass to matter in a pan-Asian context; only the Singapore market remains in the focus of investors. We increased weightings in Singapore in the last quarter as the country stands out for its commitment to systematic restructuring. The Singapore government seems committed to reducing stakes in major government-linked corporations. Recently released economic data showed no slowdown from higher base effects. Non-oil domestic exports and domestic consumption continued to show robust growth numbers. The year-on-year loan growth number picked up as well. Although we have been adding Singapore banks incrementally, we will not aggressively overweight banks until they show a clear direction in the usage of surplus capital. The preference of Singapore banks to keep waiting for the right acquisition opportunities rather than return capital to shareholders could cause a delay in achieving their medium-term return on equity targets. In the technology sector, we reduced weightings in Natsteel Electronics and added to Chartered Semiconductor given recent price corrections. In Malaysia, we continued to stay underweight the market as we are still concerned with corporate governance issues and declining liquidity as trade surpluses start to slow down. We expect to continue to retain a large overweight in the information technology and semiconductor stocks. After recent massive corrections, Asian technology and telecommunication stocks are much cheaper on a relative basis compared to their global counterparts. Despite this, they have been unable to de-couple from global trends that have caused the big corrections in expensive NASDAQ stocks. As for the outlook for the Asian markets, we believe that the best of macroeconomic releases are behind us as GDP growth for Asia peaked in the first quarter of this year. We expect growth rates to decelerate in the second half of 2000 and into 2001, due to higher base effects and slower external demand. Net exports for the Asian region should continue to stay strong, albeit with declining impact as the main engine of growth. Improving domestic demand will be crucial in determining future growth prospects. JAPAN The Japanese equity market, together with global equity markets, faced a challenging environment during this review period. First, domestic retail investors had ballooned their purchases for "new economy" equities and long margin positions rose to over $50 billion at the peak of the market in March 2000. As these stocks fell sharply, such investors became forced sellers in a declining market. In addition, further accelerating the delta of the decline were foreign investors together with Japanese institutions that unloaded their "cross-holdings" into the September half-year book closing. Domestic banks were particularly aggressive with their sales after the Bank of Japan terminated the "0%" interest rate policy. Although we forecasted a modest rise in interest rates during the third quarter, we had not considered the negative impact it would have on institutional stock sales. Secondly, this period can be characterized as one of "Macro Vice, Micro Virtue." Although the first quarter GDP (at 10% annualized) and second quarter GDP (at 4.2% annualized) were ahead of consensus expectations, the carefully watched improvement in consumer spending was not evidenced by published economic data, which could be attributed to data quality problems. Corporate profit growth, on the other hand, showed remarkable gains. For example, non-financial companies during the April-June period reported an aggregate 3% top line growth while profits jumped 39% - a clear indication to us that the efforts of restructuring are bearing abundant fruit. In addition, many observers of Japan expected a more favorable flow into equities when the huge redemption of 10-year postal deposits began to mature, commencing in early 2000. These colossal maturing deposits are estimated to total almost 20% of Japan's annual GDP over an 18-month redemption period. Despite related optimism, the retail investor, faced with highly volatile markets and political uncertainty with the early demise of Prime Minister Obu-chi, reinvested capital gains and proceeds back into postal savings or bank deposits. We believe that economic activity, which is rapidly improving, and stock market sentiment, which declined sharply, have become excessively polarized over the last several months. The equity market has entered a transition and adjustment period after the 50% gain in 1999 while marred by uncertain global economic prospects that Greenspan will prevail and growth will slow. During the September G7 meeting, the escalation of oil prices and decline of the Euro were paramount in their discussions with the likely consensus that the worst is over. In addition, the peak in the maturity of Postal Savings in the coming months will likely result in the migration to more securities investments than in the previous months, while Japanese pension funds are also expected to increase their allocation to domestic equities. 3 Corporate Japan will increase information technology (IT) spending as a percentage of capital expenditures during the coming year with $100 billion of free cash flow now being generated by leading companies providing fuel for these investments. Japan's economic cycle is at a polar opposite of that of the U.S.; we believe IT spending and productivity improvements for corporate Japan will be noteworthy. Importantly, this will contribute to further increasing profits for related beneficiaries in Japanese enterprises, many of which we have selected for inclusion in core holdings in the portfolio. Longer term, just as Japan dominated televisions and VCR's in the 1970's and 80's, many of these world class technology companies will likely dominate the manufacturing of "digital" products, globally. This is a powerful recipe for sustainable earnings growth for a select group of Japanese stocks. When consumers regain confidence of sustainable economic recovery, a virtuous cycle will reemerge and the current stock market levels, we believe, will converge with the improvement in economic activity. We have conviction that investors, both domestic and foreign, are now too pessimistic on the dramatically improving earnings recovery. In the coming months we believe local merger and acquisition activity and a move to mark-to-market accounting by March 2001 will become catalysts for the re-evaluation of Japanese equities, on a reasonably sustainable basis. In an expensive world "priced for perfection" Japan's dominant companies are reporting earnings surprises in a market priced for disaster. During the third quarter we have made no major changes to the portfolio. Companies in our holdings such as Kyo-cera, NEC and Toshiba have revised earnings upward and we believe the next several months will be followed by similar announcements by other major companies. With the negative supply of equities now largely over and the bankruptcy of Sogo a memory, we believe the Fund is well positioned to take advantage of potential earnings surprises. On January 23, 1998, the Fund commenced a share repurchase program for purposes of enhancing shareholder value and reducing the discount at which the Fund's shares traded from their net asset value. For the nine month period ended September 30, 2000, the Fund repurchased 4,568,000 shares or 7.34% of its Common Stock at an average price per share of $10.26, excluding $228,000 in commissions paid, and an average discount of 26.32% from net asset value per share. For the year ended December 31, 1999, the Fund repurchased 5,040,600 shares or 7.49% of it's Common Stock at an average price per share of $8.23, excluding $252,000 in commissions paid, and an average discount of 15.81% from net asset value per share. Since the inception of the program, the Fund has repurchased 13,988,534 shares or 19.52% of its Common Stock at an average price per share of $8.38, excluding $663,000 in commissions paid, and an average discount of 20.60% from net asset value per share. The Fund expects to continue to repurchase its outstanding shares at such time and in such amounts as it believes will further the accomplishment of the foregoing objectives, subject to review by the Board of Directors. Sincerely, /s/ Harold J. Schaaff, Jr. Harold J. Schaaff, Jr. PRESIDENT AND DIRECTOR October 2000 THE INFORMATION CONTAINED IN THIS OVERVIEW REGARDING SPECIFIC SECURITIES IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION TO PURCHASE OR SELL THE SECURITIES MENTIONED. FOREIGN INVESTING INVOLVES CERTAIN RISKS, INCLUDING CURRENCY FLUCTUATIONS AND CONTROLS, RESTRICTIONS ON FOREIGN INVESTMENTS, LESS GOVERNMENTAL SUPERVISION AND REGULATION, LESS LIQUIDITY AND THE POTENTIAL FOR MARKET VOLATILITY AND POLITICAL INSTABILITY. - -------------------------------------------------------------------------------- DAILY NET ASSET AND MARKET VALUES, AS WELL AS MONTHLY PORTFOLIO INFORMATION FOR THE FUND, ARE AVAILABLE ON OUR WEBSITE at www.msdw.com/im. 4 Morgan Stanley Dean Witter Asia-Pacific Fund, Inc. Investment Summary as of September 30, 2000 (Unaudited) - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
HISTORICAL TOTAL RETURN (%) INFORMATION ------------------------------------------------------------------------ MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3) ---------------------- ---------------------- --------------------- AVERAGE AVERAGE AVERAGE CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL ---------- ------- ---------- ------- ---------- ------- YEAR TO DATE -19.85% -- -15.19% -- -19.72% -- ONE YEAR -3.80 -3.80% 5.49 5.49% -6.15 -6.15% FIVE YEAR -0.75 -0.15 11.57 2.21 -13.45 -2.85 SINCE INCEPTION* -20.28 -3.61 8.96 1.40 -17.99 -3.17
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. - ------------------------------------------------------------------------------- RETURNS AND PER SHARE INFORMATION [GRAPH]
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30, 1994* 1995 1996 1997 1998 1999 2000 ------ ------ ------ ------ ------ ------ --------- Net Asset Value Per Share .... $ 13.20 $ 14.34 $ 11.95 $ 8.77 $ 8.73 $ 15.26 $ 12.90 Market Value Per Share ....... $ 12.25 $ 13.33 $ 9.75 $ 7.44 $ 7.00 $ 11.81 $ 9.44 Premium/(Discount) ........... -7.2% -7.0% -18.4% -15.2% -19.8% -22.6% -26.8% Income Dividends ............ $ 0.04 $ 0.05 $ 0.61 $ 0.02 $ 0.01 $ 0.04 $ 0.03 Capital Gains Distributions .. $ 0.01 $ 0.02 -- -- -- -- -- Fund Total Return (2)......... -5.94% 9.24% -2.87%+ -26.36% -0.34% 75.39% -15.19% Index Total Return (3)........ -5.24% 2.88% -3.63% -29.55% -0.30% 54.79% -19.72%
(1) Assumes dividends and distributions, if any, were reinvested. (2) Total investment return based on net asset value per share reflects the effects of changes in net asset value on the performance of the Fund during each period, and assumes dividends and distributions, if any, were reinvested. These percentages are not an indication of the performance of a shareholder's investment in the Fund based on market value due to differences between the market price of the stok and the net asset value per share of the Fund. (3) The benchmark for investment performance is comprised of two Morgan Stanley Capital International (MSCI) indices; Japan and All-Country Asia-Pacific Free ex-Japan with each index weighted equally. * The Fund commenced operations on August 2, 1994. + This return does not include the effect of the rights issued in connection with the Rights Offering. 5 Morgan Stanley Dean Witter Asia-Pacific Fund, Inc. Portfolio Summary as of September 30, 2000 (Unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DIVERSIFICATION OF TOTAL INVESTMENTS [PIE CHART] Equity Securities (97.3%) Short-Term Investments (2.7%)
- -------------------------------------------------------------------------------- INDUSTRIES [PIE CHART] Banks (5.6%) Chemicals (4.0%) Computer & Peripherals (7.2%) Diversified Financial (5.2%) Electronic Equipment & Instruments (6.9%) Houshold Durables (6.6%) Machinery (6.0%) Other* (42.9%) Pharmaceuticals (3.9%) Semiconductor Equipment & Products (8.0%) Wireless Telecommunication Services (3.7%)
- -------------------------------------------------------------------------------- COUNTRY WEIGHTINGS [PIE CHART] Australia (7.0%) China / Hong Kong (12.3%) India (5.4%) Japan (49.8%) Malaysia (2.2%) New Zealand (0.2%) Other (4.4%) Singapore (4.8%) South Korea (6.3%) Taiwan (6.8%) Thailand (0.8%)
- -------------------------------------------------------------------------------- TEN LARGEST HOLDINGS**
PERCENT OF NET ASSETS ---------- 1. Hutchison Whampoa Ltd. (China / Hong Kong) 3.0% 2. Samsung Electronics Co. (South Korea) 2.0 3. Nintendo Co., Ltd. (Japan) 2.0 4. Sony Corp. (Japan) 1.9 5. Ricoh Co., Ltd. (Japan) 1.6 6. Matsushita Electric Industrial Co. (Japan) 1.6 7. NEC Corp. (Japan) 1.6 8. News Corp., Ltd. (Australia) 1.6 9. Canon, Inc. (Japan) 1.6 10. Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan) 1.6 ----- 18.5% ----- -----
* Other includes industries/countries not shown separately and other assets and liabilities. ** Excludes short-term investments. 6 INVESTMENTS (UNAUDITED) - ----------- SEPTEMBER 30, 2000
VALUE SHARES (000) - -------------------------------------------------------------------------- COMMON STOCKS (95.7%) (Unless otherwise noted) - -------------------------------------------------------------------------- AUSTRALIA (7.0%) AIRLINES Qantas Airlines Ltd. 913,700 U.S.$ 1,761 BANKS ------------- Commonwealth Bank of Australia 134,350 2,009 National Australia Bank Ltd. 293,450 4,055 Westpac Banking Corp., Ltd. 391,950 2,707 ------------- 8,771 ------------- BEVERAGES Foster's Brewing Group Ltd. 889,800 2,073 ------------- DIVERSIFIED TELECOMMUNICATION SERVICES Davnet Ltd. 1,006,700 589 Macquarie Corporate Telecommunications Holdings Ltd. 533,300 534 Telstra Corp., Ltd. 776,450 2,541 Telstra Corp., Ltd. (Installment Receipts) 663,000 1,085 ------------- 4,749 ------------- ELECTRONIC EQUIPMENT & INSTRUMENTS ERG Ltd. 348,460 1,671 ------------- HEALTH CARE PROVIDERS & SERVICES Sonic Healthcare Ltd. 237,150 947 ------------- INDUSTRIAL CONGLOMERATES Brambles Industries Ltd. 75,000 1,961 ------------- INTERNET SOFTWARE & SERVICES Securenet Ltd. 220,500 1,100 ------------- MEDIA News Corp., Ltd. 841,800 11,857 ------------- METALS & MINING Broken Hill Proprietary Co., Ltd. 631,300 6,549 Normandy Mining Ltd. 2,451,600 1,324 Rio Tinto Ltd. 356,800 4,784 ------------- 12,657 ------------- PHARMACEUTICALS CSL Ltd. 115,450 2,170 ------------- REAL ESTATE Lend Lease Corp., Ltd. 192,350 2,167 ------------- SOFTWARE Solution 6 Holdings Ltd. 261,450 306 ------------- 52,190 ------------- - -------------------------------------------------------------------------- CHINA / HONG KONG (12.3%) AIRLINES Cathay Pacific Airways 1,459,000 2,676 ------------- BANKS Dao Heng Bank Group Ltd. 207,000 1,025 Hang Seng Bank Ltd. 222,600 2,398 ------------- 3,423 ------------- COMMERCIAL SERVICES & SUPPLIES Cosco Pacific Ltd. 1,472,000 1,114 ------------- COMPUTERS & PERIPHERALS Legend Holdings Ltd. 2,238,000 2,124 ------------- DIVERSIFIED FINANCIALS Hutchison Whampoa Ltd. 1,700,950 22,580 Swire Pacific Ltd. 'A' 728,600 4,542 ------------- 27,122 ------------- DIVERSIFIED TELECOMMUNICATION SERVICES Pacific Century CyberWorks Ltd. 1,517,638 1,713 ------------- ELECTRICAL EQUIPMENT Johnson Electric Holdings Ltd. 1,040,000 2,234 ------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Great Wall Technology Co., Ltd. 2,513,000 927 ------------- GAS UTILITIES Hong Kong & China Gas Co., Ltd. 1,923,500 2,405 ------------- HOUSEHOLD DURABLES TCL International Holdings Ltd. 1,918,000 406 ------------- INDUSTRIAL CONGLOMERATES China Merchants Holdings International Co., Ltd. 1,302,000 994 Citic Pacific Ltd. 300,000 1,293 ------------- 2,287 ------------- INTERNET SOFTWARE & SERVICES chinadotcom corp. 41,200 545 Timeless Software Ltd. 2,524,000 453 ------------- 998 ------------- MEDIA Asia Satellite Telecom Holdings 596,000 1,452 Television Broadcasts Ltd. 376,000 2,257 ------------- 3,709 ------------- OIL & GAS PetroChina Co., Ltd. 6,782,000 1,383 ------------- REAL ESTATE Cheung Kong (Holdings) Ltd. 658,000 7,954 Henderson Land Development Co., Ltd. 143,000 737 Hong Kong Land Holdings Ltd. 562,000 1,034 Sun Hung Kai Properties Ltd. 888,000 8,371 ------------- 18,096 ------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS ASM Pacific Technology Ltd. 344,000 783 ------------- TEXTILES & APPAREL Li & Fung Ltd. 2,200,000 4,642 ------------- WIRELESS TELECOMMUNICATION SERVICES China Mobile (Hong Kong) Ltd. 1,692,000 11,231 China Unicom Ltd. 1,752,000 3,921 SmarTone Telecommunications Holdings Ltd. 188,000 295 ------------- 15,447 ------------- 91,489 ------------- - -------------------------------------------------------------------------- INDIA (5.4%) AUTOMOBILES Hero Honda Motors Ltd. 66,008 1,189 ------------- BANKS State Bank of India Ltd. 112 -- @ -------------
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VALUE SHARES (000) - ----------------------------------------------------------------------------- INDIA (CONTINUED) CHEMICALS Grasim Industries Ltd. 150,000 U.S.$ 698 Reliance Industries Ltd. 170,000 1,267 ------------- 1,965 ------------- COMMERCIAL SERVICES & SUPPLIES Aptech Ltd. 164,800 1,641 ------------- COMPUTERS & PERIPHERALS Digital Equipment (India) Ltd. 108,322 1,136 ------------- CONSTRUCTION MATERIALS Associated Cement Cos., Ltd. 110 -- @ Gujarat Ambuja Cements Ltd. 255,000 861 ------------- 861 ------------- DIVERSIFIED TELECOMMUNICATION SERVICES Mahanagar Telephone Nigam Ltd. 468,127 1,117 Videsh Sanchar Nigam Ltd. 75,810 1,205 ------------- 2,322 ------------- ELECTRICAL EQUIPMENT Bharat Heavy Electricals Ltd. 450,200 1,018 Sterlite Industries (India) Ltd. 236,750 880 Sterlite Optical Technologies Ltd. 236,750 4,271 ------------- 6,169 ------------- GAS UTILITIES Gas Authority of India Ltd. GDR 115,000 650 ------------- INVESTMENT COMPANIES (b)Morgan Stanley Growth Fund 17,158,100 4,067 ------------- IT CONSULTING & SERVICES HCL Technologies Ltd. 30,835 773 Infosys Technologies Ltd. 60,650 9,687 NIIT Ltd. 79,200 2,455 Ramco Systems Ltd. 23,400 672 SSI Ltd. GDR 105,000 609 ------------- 14,196 ------------- MACHINERY Escorts Ltd. 180,000 326 ------------- METALS & MINING Tata Iron & Steel Co., Ltd. 1,949 4 ------------- PHARMACEUTICALS Dr. Reddy's Laboratories Ltd. 28,000 765 Ranbaxy Laboratories Ltd. 68,000 942 ------------- 1,707 ------------- ROAD & RAIL Container Corp. of India Ltd. 268,900 702 ------------- SOFTWARE Mastek Ltd. 1,800 97 PSI Data Systems Ltd. 31,785 402 SSI Ltd. 26,000 1,357 Tata Infotech Ltd. 25 -- @ ------------- 1,856 ------------- TEXTILES & APPAREL Shopper Stop 324,100 1,128 ------------- TOBACCO ITC Ltd. 14,900 232 ------------- 40,151 ------------- - -------------------------------------------------------------------------- INDONESIA (0.1%) TOBACCO Gudang Garam Tbk 472,000 U.S.$ 565 - -------------------------------------------------------------------------- JAPAN (49.8%) AUTO COMPONENTS Nifco, Inc. 375,000 4,314 ------------- AUTOMOBILES Nissan Motor Co. 1,160,000 6,668 Suzuki Motor Corp. 430,000 4,477 Toyota Motor Corp. 195,000 7,719 ------------- 18,864 ------------- BANKS The Bank of Tokyo-Mitsubishi, Ltd. 85,000 1,006 ------------- BUILDING PRODUCTS Sanwa Shutter Corp., Ltd. 642,000 1,756 ------------- CHEMICAL Daicel Chemical Industries Ltd. 1,220,000 3,393 Denki Kagaku Kogyo Kabushiki Kaisha 500,000 1,817 Kaneka Corp. 829,000 8,785 Lintec Corp. 403,000 3,785 Mitsubishi Chemical Corp. 1,070,000 3,720 Shin-Etsu Polymer Co., Ltd. 587,000 4,043 ------------- 25,543 ------------- COMMERCIAL SERVICES & SUPPLIES Dai Nippon Printing Co., Ltd. 413,000 6,145 Nissha Printing Co., Ltd. 105,000 608 ------------- 6,753 ------------- COMPUTERS & PERIPHERALS Fujitsu Ltd. 475,000 11,053 Mitsumi Electric Co., Ltd. 246,000 9,715 NEC Corp. 524,000 11,926 Toshiba Corp. 1,346,000 10,869 ------------- 43,563 ------------- CONSTRUCTION & ENGINEERING Kurita Water Industries Ltd. 295,000 5,456 ------------- DISTRIBUTORS Nissei Sangyo Co., Ltd. 165,000 2,157 ------------- DIVERSIFIED FINANCIALS Hitachi Credit Corp. 378,400 10,349 ------------- DIVERSIFIED TELECOMMUNICATION SERVICES Nippon Telephone & Telegraph Corp. 932 9,159 ------------- ELECTRIC UTILITIES Tokyo Electric Power Co., Inc. 162,000 3,822 ------------- ELECTRICAL EQUIPMENT Furakawa Electric Co., Ltd. 213,000 5,894 Kyudenko Co. 330,000 1,264 ------------- 7,158 ------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Hitachi Ltd. 955,000 11,102 Kyocera Corp. 70,000 10,708 - --------------------------------------------------------------------------
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VALUE SHARES (000) - -------------------------------------------------------------------------- JAPAN (CONTINUED) ELECTRONIC EQUIPMENT & INSTRUMENTS (CONTINUED) Ryosan Co., Ltd. 173,000 U.S.$ 3,368 TDK Corp. 86,000 10,923 ------------- 36,101 ------------- FOOD & DRUG RETAILING FamilyMart Co., Ltd. 142,200 3,672 ------------- FOOD PRODUCTS House Foods Corp. 147,000 2,022 Nippon Meat Packers, Inc. 258,000 3,545 ------------- 5,567 ------------- HOUSEHOLD DURABLES Aiwa Co., Ltd. 169,800 1,697 Casio Computer Co., Ltd. 552,000 6,448 Matsushita Electric Industrial Co. 456,000 11,964 Rinnai Corp. 170,700 3,727 Sangetsu Co., Ltd. 127,000 1,839 Sekisui Chemical Co., Ltd. 1,043,000 3,423 Sekisui House Ltd. 575,000 5,571 Sony Corp. 137,000 13,920 ------------- 48,589 ------------- LEISURE EQUIPMENT & PRODUCTS Fuji Photo Film Co., Ltd. 284,000 9,531 Nintendo Co., Ltd. 79,400 14,523 Yamaha Corp. 432,000 3,633 ------------- 27,687 ------------- MACHINERY Amada Co., Ltd. 667,000 5,534 Daifuku Co., Ltd. 581,000 5,726 Daikin Industries Ltd. 475,000 9,182 Fuji Machine Manufacturing Co., Ltd. 184,500 6,585 Fujitec Co., Ltd. 400,000 3,208 Minebea Co., Ltd. 500,000 5,864 Mitsubishi Heavy Industries Ltd. 1,250,000 4,960 Tsubakimoto Chain Co. 832,000 3,070 ------------- 44,129 ------------- MARINE Mitsubishi Logistics Corp. 260,000 2,181 ------------- OFFICE ELECTRONICS Canon, Inc. 264,000 11,724 Ricoh Co., Ltd. 660,000 12,023 ------------- 23,747 ------------- PHARMACEUTICALS Ono Pharmaceutical Co., Ltd. 209,000 8,604 Sankyo Co., Ltd. 341,000 7,604 Yamanouchi Pharmaceutical Co., Ltd. 190,000 9,161 ------------- 25,369 ------------- REAL ESTATE Keihanshin Real Estate Co., Ltd. 164,000 490 Mitsubishi Estate Co., Ltd. 392,000 4,092 ------------- 4,582 ------------- - -------------------------------------------------------------------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS Rohm Co., Ltd. 29,000 U.S.$ 7,961 ------------- TRADING COMPANIES & DISTRIBUTORS Nagase & Co., Ltd. 150,000 793 ------------- 370,278 ------------- - -------------------------------------------------------------------------- MALAYSIA (2.2%) BANKS Commerce Asset Holding Bhd 351,000 827 Malayan Banking Bhd 797,000 3,062 Public Bank Bhd 827,000 614 ------------- 4,503 ------------- BEVERAGES Carlsberg Brewery (Malaysia) Bhd 521,000 1,563 ------------- DIVERSIFIED TELECOMMUNICATION SERVICES Telekom Malaysia Bhd 654,000 1,721 ------------- ELECTRIC UTILITIES Tenaga Nasional Bhd 449,000 1,335 ------------- HOTELS RESTAURANTS & LEISURE Resorts World Bhd 476,000 770 Tanjong plc 570,000 1,178 ------------- 1,948 ------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS Malaysian Pacific Industries Bhd 199,000 1,322 ------------- TOBACCO British American Tobacco (Malaysia) Bhd 223,000 2,098 ------------- WIRELESS TELECOMMUNICATION SERVICES Digi.com Bhd 957,000 1,713 ------------- 16,203 ------------- - -------------------------------------------------------------------------- NEW ZEALAND (0.2%) DIVERSIFIED TELECOMMUNICATION SERVICES Telecom Corp. of New Zealand Ltd. 671,100 1,674 ------------- - -------------------------------------------------------------------------- SINGAPORE (4.8%) AEROSPACE & DEFENSE SIA Engineering Co., Ltd. 671,000 579 ------------- AIRLINES Singapore Airlines Ltd. 448,000 4,250 ------------- BANKS DBS Group Holdings Ltd. 602,979 6,657 Oversea-Chinese Banking Corp., Ltd. 461,700 2,920 Overseas Union Bank Ltd. 356,210 1,659 United Overseas Bank Ltd. 218,000 1,567 ------------- 12,803 ------------- COMPUTERS & PERIPHERALS Natsteel Electronics Ltd. 494,000 1,278 ------------- DIVERSIFIED FINANCIALS Keppel Corp., Ltd. 572,000 1,164 ------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Omni Industries Ltd. 827,000 1,308 Venture Manufacturing (Singapore) Ltd. 279,000 2,695 ------------- 4,003 ------------- - --------------------------------------------------------------------------
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VALUE SHARES (000) - -------------------------------------------------------------------------- SINGAPORE (CONTINUED) INSURANCE Pacific Century Regional Developments Ltd. 57,000 U.S.$ 570 ------------- MARINE Neptune Orient Lines Ltd. 688,000 617 Sembcorp Logistics Ltd. 383,200 2,358 ------------- 2,975 ------------- MEDIA Singapore Press Holdings Ltd. 184,600 2,770 ------------- REAL ESTATE City Developments Ltd. 297,000 1,452 DBS Land Ltd. 645,000 987 ------------- 2,439 ------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS Chartered Semiconductor Manufacturing Ltd. 330,000 2,106 ST Assembly Test Services Ltd. 300,000 590 ------------- 2,696 ------------- 35,527 ------------- - -------------------------------------------------------------------------- SOUTH KOREA (6.3%) AUTOMOBILES Hyundai Motor Co., Ltd. 48,210 627 ------------- BANKS Hanvit Bank 536,130 786 Hanvit Bank GDR 22,100 62 H&CB 101,236 2,397 H&CB GDR 8,112 192 Kookmin Bank 136,341 1,626 Shinhan Bank 200,630 2,249 ------------- 7,312 ------------- COMMUNICATIONS EQUIPMENT Telson Electronics Co., Ltd. 93,040 527 ------------- DIVERSIFIED TELECOMMUNICATION SERVICES Korea Telecom Corp. 3,020 181 Korea Telecom Corp. ADR 65,000 2,186 ------------- 2,367 ------------- ELECTRIC UTILITIES Korea Electric Power Corp. 39,320 1,026 Korea Electric Power Corp. ADR 148,600 1,941 ------------- 2,967 ------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Communication Network Interface, Inc. 71,220 195 Humax Co., Ltd. 90,740 976 Samsung Electro Mechanics Co., Ltd. 32,461 1,097 ------------- 2,268 ------------- FOOD PRODUCTS Tongyang Confectionery Corp. 30,470 814 ------------- INTERNET & CATALOG RETAIL LG Home Shopping, Inc. 12,030 958 ------------- MEDIA Cheil Communications, Inc. 16,650 1,403 - -------------------------------------------------------------------------- MEDIA (CONTINUED) CJ39 Shopping Corp. 16,800 U.S.$ 535 ------------- 1,938 ------------- METALS & MINING Pohang Iron & Steel Co., Ltd. ADR 67,900 1,265 ------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS Hyundai Electronics Industries Co. 174,217 2,492 Samsung Electronics Co. 75,797 13,730 Samsung Electronics Co. (Preferred) 12,200 1,002 ------------- 17,224 ------------- WIRELESS TELECOMMUNICATION SERVICES Korea Telecom Freetel 14,900 652 SK Telecom Co., Ltd. 6,240 1,522 SK Telecom Co., Ltd. ADR 242,800 6,222 ------------- 8,396 ------------- 46,663 ------------- - -------------------------------------------------------------------------- TAIWAN (6.8%) BANKS Chinatrust Commercial Bank 1,460,480 1,096 Taishin International Bank 1,989,520 1,207 United World Chinese Commercial Bank 532,440 340 ------------- 2,643 ------------- CHEMICALS Nan Ya Plastic Corp. 1,627,419 2,286 ------------- COMMUNICATIONS EQUIPMENT Zinwell Corp. 164,000 696 ------------- COMPUTERS & PERIPHERALS Acer Communications & Multimedia, Inc. 395,352 783 Advantech Co., Ltd. 206,300 1,139 Asustek Computer, Inc. 487,040 2,581 Compal Electronics, Inc. 552,763 865 Ritek Corp. 74,750 247 ------------- 5,615 ------------- ELECTRICAL EQUIPMENT Delta Electronics, Inc. 521,250 1,856 ------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Ambit Microsystems Corp. 125,378 885 Hon Hai Precision Industry Co., Ltd. 557,860 3,669 Yageo Corp. 1,133,000 901 ------------- 5,455 ------------- FOOD & DRUG RETAILING President Chain Store Corp. 401,632 1,269 ------------- FOOD PRODUCTS Uni-President Enterprises Co. 1,073,000 757 ------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS Advanced Semiconductor Engineering, Inc. 802,355 1,104 ASE Test Ltd. 44,500 935 Macronix International Co., Ltd. 624,760 995 ProMos Technologies, Inc. 384,053 564 - --------------------------------------------------------------------------
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VALUE SHARES (000) - -------------------------------------------------------------------------- TAIWAN (CONTINUED) SEMICONDUCTOR EQUIPMENT & PRODUCTS (CONTINUED) Realtek Semiconductor Corp. 120,000 U.S.$ 571 Siliconware Precision Industries Co. 1,041,640 1,044 Siliconware Precision Industries Co. ADR 166,212 821 Taiwan Semiconductor Manufacturing Co., Ltd. 3,510,120 11,655 United Microelectronics Corp. 4,204,400 8,994 Via Technologies, Inc. 64,500 682 Winbond Electronics Corp. 1,209,560 1,827 ------------- 29,192 ------------- TEXTILES & APPAREL Far Eastern Textile Ltd. 1,163,724 1,245 Far Eastern Textile Ltd. GDR 7,941 85 ------------- 1,330 ------------- 51,099 ------------- - -------------------------------------------------------------------------- THAILAND (0.8%) BANKS Thai Farmers Bank PCL (Foreign) 1,611,600 822 ------------- CONSTRUCTION MATERIALS Siam City Cement PCL (Foreign) 251,933 598 ------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Delta Electronics PCL (Foreign) 201,316 1,099 ------------- MEDIA BEC World PCL (Foreign) 143,500 729 ------------- REAL ESTATE Golden Land Property Development PCL (Foreign) 2,849,000 304 ------------- WIRELESS TELECOMMUNICATION SERVICES Advanced Information Service PCL (Foreign) 159,000 1,343 Total Access Communication PCL 235,000 790 ------------- 2,133 ------------- 5,685 ------------- - -------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost U.S.$646,528) 711,524 ------------- - -------------------------------------------------------------------------- NO. OF WARRANTS WARRANTS (0.0%) THAILAND (0.0%) BANKS Siam Commercial Bank PCL, expiring 5/10/02 (Cost U.S.$136) 1,727,300 123 ------------- - --------------------------------------------------------------------------
FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------- SHORT-TERM INVESTMENTS (2.3%) - -------------------------------------------------------------------------- REPURCHASE AGREEMENT (a)Chase Securities, Inc., 6.25% dated 9/29/00, due 10/02/00 (Cost U.S.$17,101) U.S.$ 17,101 U.S.$ 17,101 ------------- - --------------------------------------------------------------------------
FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (0.3%) Australian Dollar AUD 313 169 Hong Kong Dollar HKD 60 8 Indian Rupee INR 140 3 Indonesian Rupiah IRP 200,600 23 Japanese Yen JPY 2,088 19 Malaysian Ringgit MYR 5,482 1,444 New Zealand Dollar NZD 77 31 South Korean Won KRW 1,071 1 Taiwan Dollar TWD 35,085 1,120 ------------- - -------------------------------------------------------------------------- TOTAL FOREIGN CURRENCY (Cost U.S.$2,826) 2,818 ------------- - -------------------------------------------------------------------------- TOTAL INVESTMENTS (98.3%) (Cost U.S.$666,591) 731,566 ------------- - -------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES (1.7%) Other Assets U.S.$ 40,209 Liabilities (27,919) 12,290 ------------- - -------------------------------------------------------------------------- NET ASSETS (100%) Applicable to 57,665,974, issued and outstanding U.S.$ 0.01 par value shares (100,000,000 shares authorized) U.S.$ 743,856 ------------- - -------------------------------------------------------------------------- NET ASSET VALUE PER SHARE U.S.$ 12.90 -------------
(a) -- The repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of this schedule of investments. The investment in the repurchase agreement is through participation in a joint account with affiliated funds. (b)-- The fund is advised by an affiliate. @ -- Value is less than U.S.$500. ADR -- American Depositary Receipt GDR -- Global Depositary Receipt
- -------------------------------------------------------------------------- SEPTEMBER 30, 2000 EXCHANGE RATES: - -------------------------------------------------------------------------- AUD Australian Dollar 1.846 = U.S. $1.00 HKD Hong Kong Dollar 7.780 = U.S. $1.00 INR Indian Rupee 45.980 = U.S. $1.00 IRP Indonesian Rupiah 8,755.000 = U.S. $1.00 JPY Japanese Yen 107.865 = U.S. $1.00 MYR Malaysian Ringgit 3.800 = U.S. $1.00 NZD New Zealand Dollar 2.453 = U.S. $1.00 KRW South Korean Won 1,115.150 = U.S. $1.00 TWD Taiwan Dollar 31.321 = U.S. $1.00 - --------------------------------------------------------------------------
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